Wood v. Unified Government of Athens-Clarke County

DAVID A. WOOD, on behalf of himself and all persons similarly situated, et al., Plaintiffs,v.UNIFIED GOVERNMENT OF ATHENS-CLARKE COUNTY, GEORGIA, Defendant.

ORDER

CLAY
D. LAND CHIEF U.S. DISTRICT COURT JUDGE.

Plaintiffs,
who are retirees of Defendant Unified Government of Athens
Clarke-County, Georgia (“ACC”), believe they had
a deal. If they worked for ACC for the requisite number of
years, they would receive premium-free health insurance
benefits throughout retirement at the same level they had on
their last day of employment with ACC, including dependent
coverage. ACC maintains that any such deal is unenforceable
because it was made without the degree of formality required
under Georgia law; and if an enforceable deal does exist, ACC
argues that it is different than the one Plaintiffs rely
upon. As explained in the remainder of this Order, the Court
finds that an enforceable deal was made but that a genuine
factual dispute exists as to the terms of the deal.
Accordingly, the parties' motions for summary judgment
(ECF Nos. 53 & 55) are denied.

SUMMARY
JUDGMENT STANDARD

Summary
judgment may be granted only “if the movant shows that
there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.”
Fed.R.Civ.P. 56(a). In determining whether a genuine
dispute of material fact exists to defeat a motion
for summary judgment, the evidence is viewed in the light
most favorable to the party opposing summary judgment,
drawing all justifiable inferences in the opposing
party's favor. Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 255 (1986). A fact is material if it
is relevant or necessary to the outcome of the suit.
Id. at 248. A factual dispute is genuine if
the evidence would allow a reasonable jury to return a
verdict for the nonmoving party. Id.

FACTUAL
BACKGROUND

I.
The Health Insurance Plans

Before
January 1, 1991, the City of Athens and Clarke County,
Georgia operated as separate government entities with
separate health insurance plans for their employees and
retirees.

A. City
of Athens Retiree Benefits

The
Mayor and City Council were the governing body for the City
of Athens. In 1975, the City Council passed a resolution
stating, “[t]he requirements for hospitalization and
life insurance coverage for retired employees shall be 15 or
more continuous years of service with the City.”
Spratlin Decl. Ex. B, Resolution re Life and Hospitalization
Insurance Coverage to Retired Employees (Feb. 4, 1975)
(“1975 City Resolution”), ECF No. 55-4 at 56. In
1990, the City Council passed a motion adopting a finance
committee recommendation stating that “employees hired
July 1, 1990 or after will receive 100% health insurance
coverage upon retirement with 15 years service, and will have
option to obtain dependent coverage at 100% cost to
retiree.” Spratlin Decl. Ex. H, Council Minutes (Mar.
6, 1990) (“1990 City Motion”), ECF No. 55-4 at
217. Plaintiffs assert that this motion establishes that the
City paid for retirees' dependent coverage prior to 1990
and that this practice was discontinued in 1990.

B.
Clarke County Retiree Benefits

The
governing authority for Clarke County was the Board of
Commissioners. In 1981, the County Commissioners approved a
motion that stated: “after January 1, 1982, the County
will pay the cost of the Health Insurance the individual has
in effect at the time of retirement.” Spratlin Decl.
Ex. L, Cty. Comm'n Minutes (Nov. 24, 1981) (“1981
County Motion”), ECF No. 55-4 at 290. In 1984, the
County Commissioners passed an amendment to its health
insurance plan, which stated: “An employee who
qualified for Benefits under the county Employees'
Retirement Plan and retires from active employment will be
eligible to continue as a member of the Health Care Program
without cost.” Spratlin Decl. Ex. M, Cty. Comm'n
Minutes (Aug. 14, 1984) (“1984 County Motion”),
ECF No. 55-4 at 292. The amendment further provided:
“As soon as the retiree is eligible for Medicare, the
retiree and/or spouse must enroll. At this time, the Program
will be excess over Medicare.” Id. Finally,
the amendment stated: “An employee obtains vested
rights after 10 [continuous] years of service with Clarke
County.” Id.

C. ACC
Governance and Retiree Benefits

1.
ACC Governance

The
City and County consolidated to form ACC, effective January
1, 1991. ACCs Charter contains a number of relevant
provisions:

♦ “No permanent full-time employee of the City of
Athens or Clarke County shall suffer any diminution of
compensation resulting from the adoption of this charter. The
definition of compensation includes, but is not limited to,
salary, insurance and retirement benefits, annual and sick
leave, and rights provided by a merit system.” Charter
of the Unified Gov't of Athens-Clarke Cty. (“ACC
Charter”) § 9-104(b), 1990 Ga. Laws 3560, 3626,
ECF No. 55-2 at 16, 49.

♦ Requires ACC to ensure that all employees performing
the same functions and having the same responsibilities
receive uniform compensation by the end of the fourth year of
ACC s operations. Id. § 9-104(c), ECF No. 55-2
at 49.

♦ The existing ordinances and resolutions of the City
and County and their agencies that are not inconsistent with
the Charter “shall continue in effect as ordinances,
resolutions, rules, or regulations of Athens-Clarke County,
Georgia . . . until they have been repealed, modified, or
amended.” Id. § 9-109, ECF No. 55-2 at
50.

♦ “Except as otherwise provided by this charter,
all contracts . . . and other obligations or instruments
entered into by Clarke County [or the City] or for its
benefit prior to the effective date of this charter shall
continue in effect according to the terms thereof as
obligations and rights of the unified government[.]”
Id. §§ 9-110(a) & (b), ECF No. 55-2 at
50.

2.
ACC Retiree Benefits

After
unification in 1991, ACC employees and retirees
“received health care benefits without payment of any
portion of the costs of said benefits in the form of
premiums, though said employees [and retirees] have paid
deductibles, co-pays, non-covered costs and other such
traditional charges which are usually found in employer
sponsored group health insurance programs.” Spratlin
Decl. Ex. S, 2002 ACC Ordinance § 1-9-19 (June 4, 2002),
ECF No. 55-4 at 641. Until 2002, ACC had only one insurance
plan at a time, and that plan applied to both employees and
retirees.

In
2002, ACC enacted Ordinance § 1-9-19. See generally
id., ECF No. 55-4 at 641-47. It provided that ACC would
“continue to offer premium free health care
benefits” to retirees hired before December 1, 2001 who
were “under the age of 65 and not receiving Medicare B
benefits.” Id. at 645. It further provided
that retirees hired before December 1, 2001 who were eligible
for Medicare or “whenever they become eligible for
Medicare, shall be required to elect Medicare in order to
receive Athens-Clarke County health insurance coverage which
will be secondary to Medicare.” Id. at 646.
Those retirees enrolled in Medicare Part B would still
receive premium-free secondary health insurance through ACC.
Id. Dependents of retirees who were hired before
December 31, 1993 were “treated in the same manner as
the retiree; thus, such dependents shall receive premium free
insurance once said dependent qualifies and enrolls in
Medicare Part B so that his or her insurance with
Athens-Clarke County becomes secondary to Medicare Part
B.” Id. The 2002 ordinance stated that the
premium-free secondary insurance for “retirees who were
hired after December 1, 2001” and
“dependents of retirees who were hired after
December 31, 1993” “shall be subject to
termination or modification in any respect by the Mayor and
Commission in its sound discretion.” Id.
(emphasis added). The ordinance did not make a similar
statement regarding retirees who were hired before December
31, 1993.

In
2013, ACC replaced Ordinance § 1-9-19. Under the new
ordinance, retirees were no longer enrolled in ACC's
health insurance program. Instead, retirees (and dependents
of retirees hired before January 1, 1994) received
contributions to healthcare reimbursement accounts so they
could purchase their own insurance from a marketplace.
Spratlin Decl. Ex. U, 2013 ACC Ordinance § 1-9-19 (June
4, 2013), ECF No. 55-4 at 663. To receive this ...

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